Mexico's antitrust commission said Thursday it fined four pension fund management firms and 11 individuals a combined 1.1 billion pesos ($58 million) for making agreements to limit transfers of retirement accounts from one manager to another, restricting competition in the market.
The Federal Competition Commission said that between November 2012 and June 2014, six bilateral agreements were signed among pension fund managers known as Afores, which manage compulsory worker retirement savings accounts.
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Profuturo GNP Afore, Afore Sura, Afore XXI Banorte and Principal Afore were those fined, as well as 11 individuals.
The point to the agreements, which placed weekly caps on the number of transfers between two Afores, was to lower the commercial cost involved in competing for accounts, but the savings weren't reflected in better commissions for customers, the antitrust commission said.
"In a market where the investments and commissions charged by Afores are regulated, transfers are a fundamental source of competition," it said. "Agreeing to limit them reduces incentives to offer better service, and eliminates the possibility for workers to reward or punish their Afore based on their level of satisfaction."
Regulators added the agreements were monitored through emails that sought to hide the identity of the Afores, showing that those involved knew what they were doing was illegal.
The companies and individuals that were fined can challenge the ruling in court.
Grupo Financiero Banorte SAB, which owns half of Afore XXI Banorte, said the fine against the Afore was reduced to 300 million pesos from 429 million pesos because the pension fund manager cooperated with the investigation.
Banorte said the agreements were temporary and sought to delay the transfer of accounts by workers who were "constantly switching Afores." Afore XXI Banorte is analyzing a possible legal challenge to the amount of the fine, it added.
Profuturo GNP said the fine won't have a significant impact on its results, and the company has taken measures to avoid a repeat of such practices. Afore Sura and Principal Afore couldn't immediately be reached for comment.
Mexican pension system regulator Consar said the agreements among the Afores were limited to commercial activities, and didn't have an impact on individual accounts or put worker savings at risk. Mexico's Afores had assets under management of around $152 billion in March, equivalent to nearly 15% of gross domestic product.
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(END) Dow Jones Newswires
May 04, 2017 15:09 ET (19:09 GMT)